Telecom Egypt Co., the country’s monopoly fixed-line telephone provider, tumbled the most in 11 months after the government set a one-year deadline for it to exit a local mobile phone venture with Vodafone Group Plc. (VOD)
The shares fell 8.3 percent, the biggest drop since April 22, to 16 Egyptian pounds, paring a 9 percent advance this year and giving the company a market value of 27.3 billion pounds ($3.9 billion). With the fourth-largest weighting on the benchmark EGX 30 Index, Telecom Egypt led the gauge’s 2.9 percent decline today.
The 80 percent government-owned operator will have to pay 2.5 billion pounds for a mobile license and has a year to negotiate the disposal of its 45 percent stake in Vodafone’s local unit, Minister of Communications Atef Helmy said yesterday.
“The sale would hit Telecom Egypt,” Giza, Egypt-based Naeem Holding said in an e-mailed research note today. The company would “lose income from investments from Vodafone Egypt and revenue from the nascent mobile business would be insufficient to offset the impact in the short term,” it said. The brokerage cut Telecom Egypt’s rating to hold from accumulate.
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